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On Jan. 27, 2009, the House Judiciary Committee approved the Helping Families Save Their Homes in Bankruptcy Act of 2009 by a vote of 21-15, and reported it to the full House. The bill is expected to be folded into the 2009 Omnibus Appropriations Bill, slated for imminent consideration in the House. Introduced by Sen. Richard Durbin (D-Ill.), H.R. 200 delegates authority to bankruptcy judges to rewrite first mortgage terms by lowering the value of a mortgage to the current market value of the property, reducing interest rates and extending loan maturity.

With the recent economic turmoil, there have been rumors that the current 110th Congress may address modification of 11 U.S.C. §1322(b)(2). If not addressed by the 110th Congress in its waning days, legislation most certainly will be introduced in the 111th Congress to make primary home mortgages subject to cramdown.

The federal judiciary has not had a substantial pay raise since 1991, but on January 31, 2008 the Senate Judiciary Committee marked up and approved the Federal Judicial Salary Restoration Act of 2007 (S. 1638) by a vote of ten to seven.  Notably, the mark up included an amendment by Senator Feingold (D- WI) to limit judicial gifts related to attendance at privately-funded educations trips and seminars (Feingold Amendment).  The next stop would be the Senate floor, but sources say the addition of the Feingold Amendment could doom final passage.

Representative Miller (D–N.C.) introduced H.R. 3915 on Oct. 22, 2007 on his own behalf and on behalf of Representatives Watt (D–N.C.) and Frank (D–Mass.). The bill would enact the Mortgage Reform and Anti-Predatory Lending Act of 2007 (MRAPLA). MRAPLA includes three titles, each of which deals with residential mortgages. The provisions of MRAPLA are complex, and not all of them can be addressed in this short summary. This introduction notes some of the more important provisions of Titles I, II and III.

H.R. 3609. This bill, entitled the “Emergency Home Ownership and Mortgage Equity Protection Act of 2007,” was introduced by Rep. Brad Miller (D-N.C.) and Rep. Linda Sanchez (D-Calif.) on Sept. 20, 2007. A hearing was conducted on this bill before the House Judiciary Subcommittee on Commercial and Administrative Law on Sept. 25, 2007, and the bill was “marked up” on Oct. 2, 2007.

A widely held assumption in bankruptcy cases and other litigation is that fraudulent intent cannot be established on a summary judgment motion but may only be found after a full trial on the merits. Judges in fraudulent conveyance cases are not accustomed to deciding intent, solvency or constructive fraudulent conveyances on summary judgment evidence and may simply assume that if a case is not settled, it will be tried.

The U.S. Bankruptcy Court for the Eastern District of New York recently decided in In re R.F. Cunningham & Co. Inc., 355 B.R. 408 (Bankr. E.D.N.Y. 2006), in the context of a motion to lift the automatic stay, that a statutory lien under Ohio law was susceptible to being avoided as a secret lien under §544(a)(1) of the Bankruptcy Code. Champaign Landmark, an Ohio vendor, was owed approximately $150,000 for grain picked up by the New York debtor.

Reps. John Conyers (D-Mich.), Mel Watt (D-N.C.), Jerrold Nadler (D-N.Y.) and Sheila Jackson-Lee (D-Texas) introduced legislation (H.R. 3697) to protect the families and small businesses that were financially devastated by Hurricane Katrina from being penalized by the provisions contained in the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA), which is scheduled to take effect on Oct. 17, 2005. This bill contains the following provisions:

A chapter 7 debtor seeking to retain personal property secured by a lien has several options available, one of which is redeeming the property from the lien pursuant to §722 of the Bankruptcy Code. Although there remains a split of authority on the question, the prevailing view is that the appropriate measure of value for a contested redemption is the liquidation value of the property. This favorable valuation standard has made redemption motions increasingly popular.

This bill passed the House by a vote of 418 - 0 and is now pending in the Senate Judiciary Committee. The legislation is responsive to the decision of the U.S. Supreme Court in Lexecon, Inc. v. Milberg Weiss Bershad Hynes & Lerach, which held that statutory authority did not exist for a transferee judge, conducting pretrial proceedings, to transfer a case to his or her own district for a trial. H.R.1768 would amend the statute to allow a judge with a transferred case to retain it for trial or to transfer it to another district.